Google rival BLASTS Almunia 'n' pals for settlement proposals

Auctioning off links WILL pay off for Google, insists Foundem

Common Topics

The lead complainant against Google in the ongoing European antitrust case has accused the Competition Commission led by Joaquin Almunia of "misleading" other Commissioners and the European Parliament about the search giant’s proposals to resolve the matter.

In an open letter (PDF) to the Commissioner on Wednesday, search and price comparison site Foundem's CEO Shivaun Raff claims that the Competition Commission’s arguments have been “lifted wholesale from Google submissions that the Commission made no meaningful attempt to validate”.

Specifically, Raff argues that Google’s proposals to auction links to service rivals will generate billions of dollars of revenue for Google at the expense of those rivals’ profits. Almunia has claimed this will not be the case.

The CEO also says that Almunia’s position is directly contrary to the Commission’s own Preliminary Assessment paper from 2013 which said that “paid search traffic cannot be a substitute for the free, natural search traffic Google is illegally diverting”.

According to Raff, the Commission also operated a one-way flow of information as Almunia tried to reach a settlement in the case, which has been rumbling on for more than three years. “In contrast to the Commission’s near-total lack of transparency with complainants regarding the arguments and submissions Google was making behind closed doors, the Commission has exercised its powers of discretion to provide Google with an extraordinary degree of access to documents during the settlement negotiations,” says Raff in her formal response.

Under the cross-heading "Misleading the College of Commissioners", Foundem claimed the Commissioner "had broadcast [Google's] same erroneous arguments to Commissioners and MEPs", adding "this is particularly troubling as they provide the only oversight and safety-net for what is otherwise a dangerously opaque process”.

Article 9

Google is accused of promoting its own services above those of its rivals and abusing its dominant market position. Commissioner Almunia could, if he sees fit, impose a fine of up to 10 per cent of the company’s annual global turnover. Instead he has opted for a so-called Article 9 resolution.

Under Article 9, the Commission can impose a set of legally binding conditions on the accused company for a period of five years in an effort to resolve or undo any breach of competition law, without having to find the company “guilty”. Almunia has been a fan of this approach over his tenure, arguing that it is expedient in the fast-moving world of technology.

However, many in Brussels are currently muttering that the Commissioner has not undertaken nearly as much work in his term as his predecessors, a situation that may propel him to reach a conclusion on the current Google case before the end of his term in October.

On the other hand, some of the complainants believe that he will drag the matter out until his term is finished and hand the whole problem over to the next Competition Commissioner. Indeed some of them think this would be preferable to pushing through what they see as the flawed package of proposals currently on the table.

The Spanish politician is also under political pressure to come up with more robust constraints on Google.

Privately, other Commissioners have said they are not satisfied with the promises he has extracted from Google, and in May, French and German economy ministers wrote to Almunia criticising the settlement plan.

Google is already the subject of a handful of other antitrust complaints, most recently from rival app store owners over the dominance of its Android platform in the mobile market. ®